Feebate

A blend of fee and rebate, this is an idea that seeks to improve energy efficiency and reduce pollution. For example, when you bought a new car, you would pay an extra fee if it were an inefficient user of fuel, or alternatively get a rebate if it were energy-efficient. The neutral point would be set so that fees and rebates balanced, so it became neither an inflationary measure nor a disguised tax. Similar schemes have been proposed to reduce the consumption of water and other resources and as a way to improve the energy efficiency of new buildings. The term is mainly to be found in the USA; it has been around since the early 1990s at least (it appeared in Bill Clinton’s 1992 campaign literature), and limited schemes have been applied in some places, though usually not under this name. Initiatives that penalise heavy users (gas-guzzler taxes, for example) strictly aren’t feebate schemes, as there’s no rebate element; others, like the British licence-tax reductions for small cars, should equally fall outside its scope, as there’s no explicit balancing penalty. But most environmentalists seem to use the term loosely to mean any tax or charge that is scaled to encourage economy; the word is still mostly to be found in the jargon of such groups.

All policies that operate through mechanisms similar to fuel-economy standards — policies such as “feebates” that tax vehicles with lower fuel economies and subsidize vehicles with higher fuel economies — lead drivers who purchase more fuel-efficient vehicles to drive them more than they otherwise would.

Environment, Jan. 1997

Governments could speed up this process, by insisting on higher standards for emissions, or by “feebates”, making those who buy inefficient, polluting cars pay a fee used to rebate those buying cleaner, greener cars.

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